SpaceX shows AI revenue growth outpaced by heavy computing spending

What did SpaceX report about its AI business?

SpaceX released its third-quarter results, and its AI unit stood out. The Super Intelligence segment runs computing infrastructure, cloud services and AI models such as Grok. Its revenue grew sharply from a year earlier.

Why it matters: The bill grew faster. Capital spending is money spent building data centers and equipment. For this segment, it far exceeded revenue through September, according to the results. It also made up most of the company's total capital investment.

SpaceX also reported a large rise in its computing capacity compared with a year earlier.

Why does Starlink matter so much?

Starlink, the satellite internet service in the Connectivity segment, supplied most of SpaceX's operating income in the quarter. Operating income is profit from running the business, before interest and taxes.

The AI segment also earned an operating profit, but a much smaller one. The Space segment posted an operating loss.

Starlink's revenue and its consumer subscriber base both grew strongly from a year earlier, according to the company.

How did the shares trade?

SpaceX shares rose 7.8% on Wednesday to close at $159.31. The gain added $150 billion to the company's stock market value, which reached $2.1 trillion.

In after-hours trading, the stock slid 1.6% to $156.70. The reports do not say what drove either move.

Could the AI spending pay off?

Capital spending builds assets meant to earn money later. That makes it different from an operating loss or money permanently gone, the reports note.

What remains unclear is how quickly the new capacity could earn a return. SpaceX says its strategy focuses on capital efficiency and returns.

The reports give no date for SpaceX's next results. For the wider market, the Federal Reserve announces its next rate decision on Oct. 28 at 2 p.m. ET.